This is a blog by a former CEO of a large Boston hospital to share thoughts about hospitals, medicine, and health care issues.

Tuesday, November 13, 2007

Dutch Treat

I just returned from a quick trip to Amsterdam where I was invited to speak at a session called "Health Care Innovation Event", a conference of the CEOs and other top administrators of many of the Dutch hospitals, along with the Dr. Ab Klink, Minister of Health, Welfare, and Sport. I am a little amazed by this -- and no, I am not being falsely modest -- but people are very interested in the quality and safety process improvement steps we have taken at BIDMC and also in our efforts at transparency on this blog and on our hospital's website. I am surprised because I think we are just beginning to tap the potential improvements we can make in this arena, and we consider ourselves as just learning how to do it well. Other hospitals, like those in the Ascension Health system and Cincinnati Children's Hospital, have been at it for a longer time and with greater results. Nonetheless, it is very nice to have a chance to explain our programs to others around the world and to meet really interesting and thoughtful people. Inevitably, I bring back more ideas than I impart.

After the formal presentations in Amsterdam (at the amazing ING building!), we had break-out sessions during dinner. (They were very accommodating and made my table the sole English-speaking one.) During the sessions, the facilitator at each table was posting the table's comments in real time on video discussion boards spread around the room. It was like having a dozen simultaneous twitter sites going on! Later, the combined discussion board was used by the MC as a tool for reporting the major conclusions from each table.

By the way, the Netherlands has a very interesting and recently enacted insurance program for the country. This replaced the former system of government insurance. All people are required to have insurance and can purchase it from any of a number of private insurance companies. Some of these companies are for-profit and some are non-profit. There are about four large ones and over a dozen small ones. No company can refuse to provide coverage to any person. The annual cost of insurance is about 1000 to 1200 Euros. The government subsidizes the cost of insurance to people with low incomes. The insurance covers the full range of medical diagnostic and treatment services. You can also buy supplemental insurance to cover things like single rooms in the hospitals, cosmetic surgery, and the like.

Beyond this program of "cure" insurance, there is a separate government program for "care". This covers long-term care and other parts of the medical care spectrum that are essentially uninsurable.

I was told that the country as a whole spends 45 billion Euros on health care for these two types of coverage, for 16 million people -- or about 2800 Euros per year per person. With the "cure" portion amounting to 1000 to 1200 Euros per person, that leaves 1600 to 1800 Euros per year for the "care" portion.

The hospitals are non-profit, like most in the US. Interestingly, payment for services rendered is not generally based on the kind of diagnosis specific ("DRG") system we have in the US, although there is a movement in that direction. There is actually very little documentation -- for billing purposes -- of the services rendered. Either doctors are on salary or the billing is based on a simple count of those patients coming through. That's one way to reduce administrative costs. On the other hand, as was pointed out at our meeting, this means that there is very little accountability for the choice and efficacy of the clinical procedures actually undertaken. A person at our table suggested that Holland should move more to the US reimbursement system to hold providers more accountable. This was met with mixed reactions, as people understood that this would add administrative costs to the system.

17 comments:

Hello Paul, it was great to have you here, even for such a short time. Your contribution was much valued and inspired many to at least start thinking, about operational transparancy. Let's hope this interaction of minds, experiences and ideas will produce some much needed innovation in the healthcare sector! Brgds, Bart Jaspers

Hello, As a regular(Dutch) reader of your blog, can you tell us what the equivalent cure and care costs per person are in the USA and/or other countries? It seems like it is a good metric to start with.

Here is the gross picture. The number I always see is that health care accounts to 16% of US gross domestic product. GDP in 2006 was about 13.2 trillion dollars. So health care expenses would be just over 2 trillion. US population is about 300 million people. So that would be about $6666 per person per year. At current exchange rates, that would be 4566 Euros -- compared to your 2800 Euros.

The Commonwealth Fund says: "Health care costs vary substantially across the United States. For example, the Dartmouth Atlas of Health Care shows that Medicare [our elderly care program]outlays per beneficiary adjusted for area wage costs ranged from $4,530 in Hawaii to $8,080 in New Jersey in 2003. http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=449510

Hi Paul - I found your blog through Dayna at A Bug's Life. I'm currently a MSSW student at The University of Texas, Austin specializing in pediatric oncology social work. I'm doing my first clinical rotation at Scott and White Hospital in Temple, TX.

My mom worked at Beth Israel for years back in the 1970s (she's a RN) and still proudly claims that as one of her most impressive jobs (along with Mass General).

I am afraid that I do not have a good answer to that. My opinion is that uninsured people do not get proper preventative care and therefore end up requiring emergency services and other higher level medical care that could have been avoided. In that case, they actually might add more costs to the health care system than would otherwise be the case. Those costs are borne by society as a whole, since people are not turned away from hospitals if they cannot pay.

Could you (or anyone else) point me to a source that can provide a more detailed explanation of how the insurance risk adjustment mechanism that compensates insurers in the Netherlands for taking on people with high cost medical issues is calculated?

Nice posting about your visit to Amsterdam.... i didn't know you where coming to our small and flat country. I would love to be in the audience, because i like your weblog and i promoted your blog many times on my blog. But, well, we can't by everywhere. So, I will be following your postings on the Internet.